Amazon in Emerging Markets Harvard Case Solution & Analysis

Amazon in Emerging Markets Case Study Solution

Risks and rewards for early and late movers:

The risks and rewards for both early and late movers is to determine the conversion of rewards into risks. Both of these are mainly dependent on some factors which includes competitive advantage, differentiation in technology, local conditions and regulations resources, business sector and time. Early movers are expected to have the benefit of being capable of development of loyalty of supplier and consumer, and to easily gain monopoly. But, there is a need to make large investments in research and development in terms of publicity and marketing. Security of market share is needed through making efforts in blocking the threats of future.

Whereas, last movers have the benefit of lower risk because of uncertainty of market and the opportunity to learn new things and imitate first movers. The low cost endurance and offer of more competitive prices with the chance present business acquisition. The drawback is their fight to gain share in market depending on either product price or product quality. If it is better or lower than their competitors or first movers in the market.

Measurement of success in emerging markets:

The measurement of Amazon’s success by the companies and investors involves:

Amazon possess long-term strategies with perception at their projections in order to increase their market share year over year. It takes a look at the management of cost to evaluate its efficiency in maximizing the revenues through bottom line approach. The awareness of Amazon’s brand is quite high and the demonstration of growth signs further than bottom line indicates that there will be changes required such as increased time span for growth in the economy of emerging market.

The macro-environment provides it with the potential for growth. However, there were many challenges faced by Amazon as a response of rules and regulation set by government. But, it had capability to manage its business growth in an easy manner according to the challenges of each state. In China, their price cut down was not expected, which then tended to be the reason of positive publicity. (Denitsa Blagova, 2014)

Competition of Amazon in China, India, Latin America with their home grown firms:

As China, India and Latin America are undoubtedly emerging markets with significant potential. Due to the fact, these all three countries are highly populated with rapid penetration of internet users in 2013 per hundred population included 51.6 in Brazil (Latin America), 45.8 in China and 15.1 in India. Similarly, there had been an increase in the middle class income.\

All these international business places for penetration by large firms face domination of domestic organizations. However, domestic firms in India includes Flip kart, Snap deal and eBay, in China –Each Net, Alibaba,and JD.com and in Latin America (Brazil) –Mercado Libre and Saraiva. Due to globalization, the entrance of multinational firms in these emerging markets had increased intensity of competition and price wars among them.

Entrance of Amazon in Emerging market:

As Amazon is financially stable and holds a strong position internationally, it should expand its business in the emerging markets throughout the world. Amazon is well experienced in operating its business in a large number of countries with culture diversity and strong base of consumers. In context to its entrance in emerging countries like India and China, they have significantly gained expertise in understanding the requirements and necessitates for business exceling the economies of emerging markets. But, there is a requirement of careful assessment of the market needs with massive potential for significant growth in future and its entrance in particular market in order to gain the advantage of moving into other country’s economy. However, factors like scope of internet penetration and terrains of geography should also needed to be concerned.(Boumphey, 2015)

Conclusion:

Amazon was incorporated and had evolved from a small vendor of online books to other products in 1994. . The entrance strategy of Amazon was not an aggressive one in China rather it chose to slow growth. The practice of competitive strategy by Amazon was by the release of next-day delivery which was followed through other organizations in India. Amazon entered in Latin America in 2012 with the launch of Kindle application by 2014. All three countries are highly populated with rapid penetration of internet users in 2013 per hundred population included 51.6 in Brazil (Latin America), 45.8 in China and 15.1 in India. Therefore, it should expand its business in the emerging markets throughout the world.

Exhibits

Exhibit – Choice Strategies

Exhibit – Risks and Rewards for early and late movers

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